Sluggish growth for Construction SMES

Published date: 24 July 2017

The SME construction sector grew in the second quarter of 2017, but at a slower rate in most parts of the UK than the first three months of the year, according to the Federation of Master Builders (FMB).

Key results from the FMB’s State of Trade Survey for Q2 2017, which is the only quarterly assessment of the UK-wide SME construction sector, include:

  • Q2 2017 was the 17th consecutive quarter of positive growth which means that the construction SME sector has been growing for more than four years (ie since Q2 2013);
  • Almost one in two construction SMEs predict rising workloads in the coming three months, with just 9% predicting a decrease in activity;
  • 83% of builders believe that material prices will rise in the next six months;
  • 60% of construction SMEs are struggling to hire bricklayers; 57% are struggling to hire carpenters and joiners; and 47% are struggling to hire plumbers;
  • Almost two-thirds (62%) of construction SMEs expect salaries and wages to increase in the next six months.

Brian Berry, Chief Executive of the FMB, said: “Rising material prices and salaries could be starting to dampen growth among construction SMEs. However, it is encouraging to see that the sector has continued to grow despite the recent snap General Election and the resulting hung Parliament."

He also addresses that political uncertainty could of had an impact on the construction SME sector as home owners may of decided to delay any big spending decisions whilst the election campaign was underway. 

In addition, due to the skills shortage firms expect wages and salaries to increase over the next six months. When looking ahead, once Brexit is negotiated, the construction has urged ministers to “bear in mind their strategic house building and infrastructure targets before pulling up the drawbridge on EU migrant workers”.

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